Rich niche

Realty agents who court the wealthy must learn to spot the species.

Legendary fashion designer Coco Chanel once observed that there are people who have money -- and then there are people who are rich.

One would have to concede that Chanel, more than most people, might have been able to parse a distinction that would elude the rest of us.

But in this sometimes insanely wealthy country of ours, there can be many variations on the theme of "rich," and Laurie Moore-Moore has dedicated her career to scrutinizing them and explaining them to outsiders in the way Roger Tory Peterson created field guides for birdwatchers.

Moore-Moore is not a naturalist. She's a former real estate agent who teaches other real estate agents how to spot the markings and interpret the nesting behavior of rich people.

"There's a mystique and perhaps a little bit of intimidation associated with that market," explains Moore-Moore, whose resume includes having trained more than 7,000 agents in the ways of the upper bracket for one major real estate company.

She went on to found and head the Institute for Luxury Home Marketing, a consulting and training firm based in Dallas, and has written "Rich Buyer, Rich Seller: A Real Estate Agents' Guide to Marketing Luxury Homes," published by her company.

Widely regarded as a diva of the upper bracket, Moore-Moore now conducts seminars around the country for agents who want to know just what "those people" want.

She tells them that those people, like the rest of us, expect service and competence. But agents don't pay her $500 a head and commit two days to her seminars in return for platitudes. The agents want to know how to find these clients and keep them happy.

That's because there's real money at stake for those who can make it in the major leagues. Moore-Moore ticks off the pros and cons of specializing in the luxury market. Among them:

Upside: There's a higher income potential, as commission typically is based on a percentage of the sales price.

Downside: Not every upper-tier listing sells (as price goes up, conversion rates tend to go down, she says); expensive homes usually take longer to move, while buyers in this group usually are in no hurry.

Upside: Upper-tier clients tend to be more immune to economic downturns, which could become increasingly relevant if rising interest rates stall activity in more modest price ranges.

Downside: There are fewer of these clients, period.

Another consideration is that the transactions can be more complicated. The all-cash sales can be simple, but sometimes high-end deals have extra players in them: trustees, private bankers, business managers or "screeners," who stand in for the actual clients in the early stages of the sale to save the boss time, to maintain confidentiality and to protect Mr. or Ms. Megabucks from overpaying.

Chicago-area agents report that big-ticket properties are, indeed, selling this spring, after dragging in the fourth quarter of 2003. Not only is this the traditional selling season, but recent reports of an economic rebound are helping reinvigorate consumer confidence, they say.

"This spring there have been a number of homes [priced at $1 million or more] that have finally sold after being on the market for a very long time," says Tina Porterfield, an agent with Prudential Preferred Properties in Hinsdale who has a long history in selling higher-priced homes.

Koenig & Strey agent Honore Frumentino says that in the last six months, houses priced from $2 million to $3 million on the North Shore typically took 188 days to sell versus 155 days for all houses there, a ratio she rates as "pretty good."

"On the high end, I tell sellers that either they'll get lucky right out of the gate, or they could be looking at a year on the market," she said.

Local agents largely agree with Moore-Moore's premise that high-end clients require special care and feeding.

"They're not buying shelter," Porterfield says. "Mainstream buyers are buying the roof over their heads, but upper-tier buyers are buying a lifestyle.

"They're looking for a lot of things. It could be a retreat, a place for some privacy because they might not have it in other aspects of their lives. Others are specifically looking for a place to entertain, where their lives require corporate entertaining as well as personal entertaining.

"And for some other people, it's just because they want it. They can afford it, and they want it," Porterfield says.

Moore-Moore says the recent phenomenon of the "I just want it" buyers has changed the marketplace.

"People talk about there being such a thing as `old money' and `new money,' but today, I think there's a third category, the `ultraconsumer,'" Moore-Moore says.

"They're people who generally earn good incomes, but they're stretching to buy as much as they can. The objective is maximizing lifestyle." The money goes out as fast as it comes in, for cars, for clothes, for travel and certainly for houses, she says.